Author Topic: Commodities  (Read 8666 times)

Moonraker

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Commodities
« on: April 29, 2013, 08:19:20 pm »
Credit Suisse says stay bearish on commodities. Gold stocks most oversold since 2008.

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Credit Suisse says: "We agree with the bearish stance on commodities held by Ric Deverell, the head of the Credit Suisse Commodities Research team. We are cautious, given that:

"Elevated prices have triggered a significant capex response, leading to excess supply in many instances;

"Chinese risks are high: the investment-share of GDP, at 48%, must fall, total debt is now 230% of GDP and quantitative tightening has started;

"Global macro momentum is slowing (we think until mid-year);

"We believe the dollar trade-weighted index has the potential to continue strengthening (typically bad for commodities);

"Commodity prices are still high relative to their long-run averages (in real terms) and producers' break-even (especially for iron ore and oil); and

Equities are a better inflation hedge than commodities, in our view.

"We remain underweight the resource sectors, which suffer from poor capital discipline, sub-market FCF yields, still optimistic positioning and in nearly all instances spot prices are below consensus (implying downgrade risks).

"Mining is the most sensitive sector to ISM and China infrastructure spending; yet, P/E relatives are only middling. When the sector has been this oversold, it has typically still underperformed over the next three months.

"Big-cap oil tends to outperform only when equities are falling, credit spreads are rising or the oil price is spiking, none of which is likely. The sector is not cheap on relative P/Es after adjusting for under-depreciation. However, we reverse our preference among the resource sectors - and now prefer energy to mining (the oil price looks more resilient than industrial commodities prices and valuations more attractive).

"Quoted gold stocks look very cheap (with P/B and forward P/E relatives both at 12-year lows) and are the most oversold since 2008.

Impact of lower commodities prices: each 10% off oil adds 0.2% to developed world GDP growth, takes 0.4% off inflation and thus allows central banks (esp. the ECB) to be more aggressive. It also adds 1.4% to European EPS (1.2% in the US). GEMs in aggregate are hurt by lower commodity prices, but commodity importers like India, Turkey and Korea benefit. Akzo Nobel, PPG, BMW and Safran are Outperform-rated commodity users with pricing power."



jaDEB

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Re: Commodities
« Reply #1 on: April 30, 2013, 07:52:29 am »
Dr Copper
jaDEB

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Moneypenny

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Re: Commodities
« Reply #2 on: April 30, 2013, 08:42:34 am »
Also our labour market historically gearing up for increases (double digit recently) now, with upcoming union elections in sight.

Moonraker

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Re: Commodities
« Reply #3 on: May 02, 2013, 10:25:36 am »
Glencore boss on acquisition trail

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London - After years of on-off talks, months of brinksmanship and often bitter negotiations, Glencore's head Ivan Glasenberg gets to complete the $30bn acquisition of Xstrata on Thursday, the mining industry's biggest takeover yet.

But even as the champagne pops, investors and rivals are asking where the highly ambitious South African will look for his next deal. Many are already pointing to vulnerable or undervalued rivals, including Anglo American [JSE:AGL]
.

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Anglo has now set itself on a turnaround path with a new CEO, but is still battling to overcome the impact of overruns at its $8.8bn Minas-Rio iron ore project in Brazil and an unprecedented squeeze in platinum, where it faces weak prices, high costs and combative unions. Its shares trade at discount to the sum of the parts that some analysts put at 50%.

"I still see Anglo as vulnerable, and I see Glencore as a natural buyer for it," Gait said.

Go for it Ivan, I need to remove AGL from my portfolio and am hoping for something like this to boost the price a little.

Moonraker

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Re: Commodities
« Reply #4 on: May 05, 2013, 07:00:43 pm »
Israeli rocket attacks on Syria. Syria regards it as a declaration of war and Egypt views it as an act of aggression - duh.
Crude oil should rise, SOL might benefit provided the R doesn't strengthen.

aspire

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Re: Commodities
« Reply #5 on: May 05, 2013, 09:27:24 pm »
It's been a while coming. Should there be a war oil is likely to rise, I wonder if there'll be any effect on gold?

jaDEB

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Re: Commodities
« Reply #6 on: May 08, 2013, 04:11:15 pm »
Dr Copper  ;D
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Moonraker

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Re: Commodities
« Reply #7 on: May 13, 2013, 02:02:39 pm »

jaDEB

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Re: Commodities
« Reply #8 on: May 13, 2013, 02:08:50 pm »
Mr Bond, u did watch the video I take? u did notice they are both blonde....
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Moonraker

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Re: Commodities
« Reply #9 on: May 13, 2013, 02:13:40 pm »
Mr Bond, u did watch the video I take? u did notice they are both blonde....
I did, but you know me, the archetypal pessimist with regard to commodities.  8)

Moonraker

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Re: Commodities
« Reply #10 on: July 29, 2013, 12:28:05 pm »
I think, JaDEB and maybe some other resources optimists might want to read the following .. (different opinions are aired, but overall it ain't looking hunky dory).

China 3% Growth Risk Seen by Barclays

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A copper price collapse of more than 60 percent, zinc cut by up to a half and oil down to $70 a barrel. That’s the fate facing world commodity markets should China’s growth dip to 3 percent in the next three years -- a scenario economists at Barclays Plc (BARC) are now examining.

They’re not the only ones building models based on a steep decline in growth in the world’s second-biggest economy. Nomura Holdings Inc. (8604) estimates a one-in-three chance of a sharp drop by the end of 2014, and Societe Generale SA sees a “non-negligible risk” of less than 6 percent growth this year and an outside chance of 3 percent average expansion for this half and next.

Orca

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Re: Commodities
« Reply #11 on: July 29, 2013, 02:04:49 pm »
Only a collapse in the world economy will drive the copper price that low.  :wtf:
I'm supposed to have left for Portugal already then I read stuff like this. :'(
I started here with nothing and still have most of it left.

jaDEB

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Re: Commodities
« Reply #12 on: July 29, 2013, 02:06:43 pm »
Thanks Mr Bond. I am thinking of getting back into gold, but I am bit late. Will wait for it to fall again, before you shout  :frustrated: at me, I am thinking, not going to, maybe, where is my tablets. Currently in people (CML) and fishies (OCE)...but am getting bored.... :wall:
jaDEB

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Orca

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Re: Commodities
« Reply #13 on: August 06, 2013, 09:42:54 am »
A scary chart of S&P 500 vs Commodities index.
There should be some correlation all the time but it lasted till end 2012. Something is bound to happen as this is not sustainable.
I started here with nothing and still have most of it left.

jaDEB

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Re: Commodities
« Reply #14 on: October 01, 2014, 10:45:06 am »
Copper  :wall:
jaDEB

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